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Selling Websites for Profit: How to Identify Sites with Good Monetization Potential
The first step in finding a site that has good monetization potential is to find one that satisfies at least one of the criteria given in the list in the previous sectionand#8212;that is, there is at least one serious problem with how it is monetized.
With that said, there are other things you should consider, too, when evaluating the monetization potential of the site in question. In the list below, we'll consider some of these other factors:
1. The permanence of traffic sources. One thing that buyers often overlook in the market for websites is the permanence of traffic sources. Often, when a seller attempts to pitch a site, he will show only the traffic statistics; and will say little or nothing about the sources.
It is important to keep in mind, of course, that these sources could be entirely transitory. For instance, the traffic might be coming from a PPC campaign or from temporary links on high PR websites.
As soon as the website owner in question stops paying for the campaigns and the links, the traffic will die down, leaving you with a site that has no semi-permanent sources of traffic.
Furthermore, even if the site owner claims that you can easily replicate the traffic generation via PPC or purchasing links, it's important to be weary of these claims, as the effectiveness of PPC campaigns can often vary from week to week; and may need your constant attention, resources, and ideas.
Instead, when it comes to identifying sites with good monetization potential, focus very narrowly on sites that have strong, permanent sources of traffic. More specifically, try to find sites that receive a lot organic search engine traffic; and traffic from a broad-base of inbound links that were not purchased.
You can start this process by asking the seller to provide documentation on the sources of traffic. In addition to this, you can search Google. This will pull up a list of all sites that link directly to the URL in question.
Using these results, you should be able to figure out whether the bulk of the good inbound links were purchased; or whether its simply a broad-base of sites that have chosen to link to the site and are unlikely to change that once the website changes hands.
In addition to finding all of the high-quality inbound links pointing towards the URL in question, you should also make an attempt to verify the authenticity of the traffic records through third-party sources. You might try this by using a site like Alexa(dot)com, which allows you to obtain detailed records about the traffic history of a site.
There are many things you can do with Alexa. Among them are the following:
i. Check the traffic quality and type. Under the "Traffic Stats," you can observe a range of different important pieces of information. Personally, I suggest that you focus on the traffic rank, the pageviews per user, the amount time on the site, and the search %.
ii. Examine how much of its traffic it receives from search engines; and what keywords and keyphrases it receives it for. Under the "Search Analytics" tab, you will find a detailed breakdown of the most popular searches used to find the site. Additionally, you can also look at keywords by "rise" and "decline" to determine where the site is losing visitors and gaining visitors.
iii. Audience demographics and clickstream. For some sites, you can obtain a demographic break-down of visitors. This can be especially useful if you are planning to introduce a new product after taking over the site. Additionally, you may also be able to determine the "clickstream," which tells you the sites that visitors are most likely to visit after visiting the URL in question. This can be useful when trying to create a picture of the types of people who visit the site.
Overall, remember that your goal is to create a detailed description of the site's traffic sources and permanence. Once you do this, you will have a better idea of whether or not the site is likely to have strong monetization potential.
2. The quality of its product. Usually, sites either sell services, access to content, or products. While this may be difficult to you do if you do not work in the site's niche, you should attempt to assess the quality of the site's product.
If it offers a book or a piece of software, consider how it fares relative to its competitors. Does it contain high-quality features and information? Or is it a weak product that could cost hundreds or thousands to re-work until you have something that could generate a high conversion rate?
One way to check this for yourself is to perform a "SWOT" analysis. That is, evaluate the product or service for its Strengths, Weaknesses, Opportunities, and Threats. In addition to this, you can also ask the site owner explicitly for documentation related to product sales. In addition to getting the sales volume from these numbers, you may also be able to infer the refund rate and the conversion rate, which could prove to be very helpful.
3. The size of its email lists. One of the most important assets that is sold along with a website is its email list. This will contain all the names and email addresses of individuals who signed up through a squeeze page or a mailing list form (usually in exchange for receiving a free product or a free newsletter).
The reason why email lists are important assets to consider is that they allow you to continue to make sales off of individuals who have already purchased from the business before. Not only is this group generally easier to sell to, but they are often willing to more than they would have on an initial purchase. Additionally, once you have a person's email address, it is considerably less costly to get them to purchase a product than it is to find an entirely new person and get her to buy.
Of course, just like all things in Internet marketing, there are good email lists and bad email lists. Just because someone selling a site claims that he has an email list with thousands of subscribers doesn't mean he is profiting from that list. And for this reason, it is always a good idea to ask for documentation before you buy. As an example, you might ask the buyer for screenshots of the account's control panel that show the following things:
i. The size of the list. Regardless of what the seller tells you, it is always good to get a screenshot to back it up.
ii. The open-rate on the previous six bulk emails. This will tell you a lot about whether or not the mailing list is active. If it's not, then you shouldn't be willing to pay much for it.
You should also consider signing up for the email newsletter to get a feeling for its quality and length. If you get the sense that it isn't high-quality, then there's a good chance that other readers are also getting this impression; and, more likely than not, are not paying serious attention to it.
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Learn about website flipping and how to
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by: Brian SD Scott
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Date: Mon, 8 Nov 2010 -
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